Morph, the Layer-2 blockchain project incubated by Bitget-one of the world’s top ten cryptocurrency exchanges by spot trading volume-has encountered significant internal challenges that threaten its future, according to multiple sources familiar with the situation.
Initially heralded as a promising competitor to Coinbase’s Base, Morph raised $20 million in seed funding in March 2024 from prominent investors including Dragonfly, Pantera, MEXC Group, Bitget’s venture arm Foresight Ventures, and Spartan Group. The project aimed to capitalize on the lucrative trend of exchanges launching their own blockchains, following Binance’s BNB Chain and Coinbase’s Base, which generated $76 million in gross profit in 2024.
However, unlike typical startups where co-founders share a unified vision, Morph’s leadership was marked by discord from the start. The project was co-founded by Cecilia Hsueh, former CMO and briefly CEO of crypto exchange Phemex, serving as Morph’s CEO, and Azeem Khan, ex-head of impact at Gitcoin, who took the COO role. The two had no prior relationship before being paired, and their strategic visions diverged sharply. Khan emphasized targeting emerging markets in Africa, South Asia, and Southeast Asia-regions where Bitget has strong growth-but internal execution of these plans stalled due to budget constraints and lack of alignment.
Tensions escalated as decision-making authority appeared fragmented. Several insiders described a “shadow CEO” figure, Forest Bai, a co-founder of Foresight Ventures and chair of The Block, who exercised significant control over Morph’s spending and strategic direction, overshadowing both Hsueh and Khan. Khan’s role diminished to that of a “ghost founder,” and he eventually resigned in March 2025, citing the lack of alignment and independent authority as factors in his departure. Hsueh remains CEO but reportedly with reduced influence within the company.
Financial management has also been a point of concern. Despite the initial seed funding, Morph’s burn rate is high, and plans for a Series A funding round remain uncertain amid internal disputes. The company has faced significant employee turnover, layoffs, and salary reductions. Some staff reportedly never received token contracts, and attempts to alter vesting terms have caused further unrest. Communication and team cohesion have suffered, with some departments nearly inactive. Nonetheless, Morph still aims to launch its native token by the end of 2025, with a projected fully diluted valuation of $500 million based on recent NFT minting promotions.
Morph’s mainnet went live in late October 2024 but has seen limited adoption, with transactions numbering around 16,000 on a recent day-far below Base’s millions of daily transactions. The token launch, a critical milestone for ecosystem growth, remains pending.
Bitget has not publicly commented on Morph’s internal issues, though it continues to support the project. The exchange recently completed cross-chain integration of its native token BGB with Morph, establishing liquidity pools and incentivizing user participation in the ecosystem.
In summary, Morph’s trajectory from a high-profile Layer-2 hopeful to a troubled project underscores the challenges of startup dynamics within crypto exchanges’ blockchain ventures. Founder disputes, lavish and unclear spending, and a lack of cohesive leadership have caused delays, layoffs, and uncertainty, casting doubt on Morph’s ability to rival established Layer-2 networks like Base.
